Achieving energy access in Africa
By International Energy Agency
Energy transition in Africa is deeply correlated with energy access issues. Sustainable access to energy has achieved unequal progress among developing regions, especially among African countries. Energy is fundamental for development. Despite GDP growth in Africa, around half (52%) of the African population, which is growing rapidly, does not have access to electricity. sub-Saharan Africa represents 14% of world population, but only 5% of global energy demand. Within the region, 62% of energy demand is supplied by biomass.
Energy access and energy transition
Economic development and living conditions are strongly affected by the lack of electricity supply, as well as the weakness of power transmission and distribution grids. The sub-Saharan Africa power sector needs greater access to capital, technologies and capacity building. Significant investments are needed to support power sector development, and ultimately enable economic breakthroughs. The 2018 Global Tracking Framework 2018 – Progress Toward Sustainable Energy, produced by The World Bank and the IEA, shows that progress towards universal electricity access and access to clean cooking facilities are smaller than the development of renewable sources in the energy mix. Significant efforts are needed to achieve the sustainable energy for all objectives by 2030(UNSE4All): universal electricity access and access to clean cooking, doubling of progress in energy efficiency, and doubling of the renewables share in the energy mix. The IEA’s World Energy Outlook 2019 will include a special focus on Africa, which will examine in detail energy access and development.
In 2017, global electrification rate reached 87%, which means less than 1 billion people do not yet have access to electricity, including more than 600 million in Africa. Progress with electrification has been slower in sub-Saharan Africa. Furthermore, recent efforts have been uneven, with around 60% of the progress seen since 2011 concentrated in just four countries (Kenya, Ethiopia, Tanzania and Nigeria). Access to clean cooking reached 64% in 2017, a slight increase. The number of people using biomass for cooking is gradually declining for the first time, reaching 2.4 billion(IEA (2018), World Energy Outlook, Paris).
Despite the acceleration in the increase of the share of renewables in the energy mix since 2010, progress is still not fast enough to achieve a doubling by 2030. Actions need to be accelerated to reach sustainable energy for all globally, and notably in Africa, to achieve a smooth transition towards clean energy in order to ensure a sustainable future for all.
Prospects for renewable sources development
IEA projections show that Africa’s electricity demand will increase by around 150% between 2017 and 2040: industrial demand almost doubles, while demand from the residential sector triples. The lack of infrastructure is a key obstacle to growth in electricity supply. The region has abundant energy resources, however, partially exploited as far as oil, gas and coal are concerned, and the renewables provide ample scope for development. Despite reforms adopted on the continent, most efforts have focused on the development of energy resources for export.
Between 2010 and 2017, almost 15% of resources global discoveries in the oil and gas sector were located in Africa, notable in the Gulf of Guinea and in East Africa. Most coal reserves are located in Southern Africa. The entire African continent also has large solar potential. Central and East Africa include most of the hydro potential; and the wind potential is mostly located in the Horn of Africa and the southern part of the continent. In 2017, renewable sources represented one quarter of electricity capacity growth.
By 2040, the increase of renewable sources in electricity supply will reduce the share of fossil fuels. The share of coal and oil in the electricity mix decrease to 12% and 5% respectively (31% and 11% in 2017). Electricity production from gas is expected to more than double but its overall share decreases to 2040. The evolution of generation capacity varies depending on the continent’s sub-regions; their development is dependent upon locally available resources. The regional dimension and the efficient development of cross-border power exchanges contribute to optimising electricity systems operations.
The financing of coal-fired power plants by OECD countries or large commercial banks from OECD countries has been drastically reduced following COP21 and the objective to limit the development of least efficient plants. The IEA recommends building plants at the highest efficiency possible while taking into account technical and operational limitations in countries. Although cleaner plants shall be encouraged, sub-critical technologies may be considered for the least-developed countries, depending on local conditions.
Energy sector growth in Africa currently largely depends on development aid and international donors. Complementarities between donors can be explored to strengthen aid effectiveness. Chinese companies are active in power sector capacity expansion. They essentially operate as contractors (selling construction services and equipment) while the host country is responsible for the investment. In 2016, the IEA found out that Chinese companies operating as the main contractor were responsible for 30% of new capacity additions in sub-Saharan Africa in 2010-15. Greenfield power projects contracted to Chinese companies are widespread in sub-Saharan Africa: over the 2010-20 time period, more than 200 projects have been included in the scope of that report. Chinese contractors have built, or are contracted to build, 17 GW of generation capacity in sub-Saharan Africa from 2010 to 2020, equivalent to 10% of existing installed capacity in sub-Saharan Africa, or to Finland’s total installed capacity(IEA (2016), Boosting the Power Sector in Sub-Saharan Africa: China’s Involvement, Paris).
At the same time as Chinese companies benefit from comparative advantages outside of China, several factors make Chinese power projects in sub-Saharan Africa attractive to African governments. Costs of power plants built by Chinese companies tend to be lower, strongly supported by Chinese loans issued by policy banks. Chinese engagement in Africa in power covers most primary sources, and all sizes of projects, while sources of financing from other countries are not keen to finance large hydropower dams or coal-fired power plants.
While increasing generation and grid capacities, and supporting electricity access for economic development, project financing remains challenging and is tending to diversify and move progressively away from public lending towards more equity financing. However, the latter remains challenging in the absence of reliable power off-takers and adequate, stable local regulation. The success of power projects depends on the ability of African governments to negotiate, implement and maintain them. Technical training of local technicians is essential to maintain efficiency and performance of plants as well as to help countries build a strong service industry for maintenance, ensuring plant sustainability and supporting broader industrial development.
The sub-Saharan Africa power sector needs greater access to capacity building, capital funds and technologies from experienced manufacturers. To achieve SE4ALL objectives in sub-Saharan Africa by 2030, enabling energy access and economic growth, all foreign stakeholders should join forces to increase power generation capacities and grid infrastructure. Greater emphasis from Chinese and other companies should be placed on T&D grids, as this will be the critical constraint to expanding access to power and generating higher levels of economic growth. Under its “open doors” policy, the IEA will continue to support expanded energy access and clean energy technology development in Africa.
⬆Clanwilliam Dam in the Olifants River, Clanwilliam, Western Cape, South Africa, Africa（CFP）